Mexico’s natural gas production averaged 4.04 Bcf/d in October, up from 3.93 Bcf/d in October 2021, according to the latest data from upstream regulator Comisión Nacional de Hidrocarburos (CNH).

Mexico

Associated gas tied to oil production accounted for 2.31 Bcf/d of the total, while non-associated gas output averaged 1.73 Bcf/d.

State oil company Petróleos Mexicanos (Pemex) reported production of 3.80 Bcf/d, compared to 3.73 Bcf/d in the year-ago month.

Production from private sector operators averaged 239 MMcf/d, up from 203 MMcf/d in October 2021.

The top gas-producing fields for October, all operated by Pemex, were Quesqui (508 Mmcf/d), Ixachi (301 MMcf), Maloob (297 MMcf), Akal (236 MMcf) and Onel (187 MMcf).

“Ixachi and Quesqui are producing very well…but it is very complex to assume these two fields could compensate” declining production from the Ku-Maloob-Zaap shallow water megafield, energy analyst Rosanety Barrios told NGI on a recent episode of the Hub and Flow podcast. “The solution, in terms of national production, is very simple. We need more contracts, more players, more fields…mainly exploration contracts. That’s the most relevant issue that Pemex has.”

President Andrés Manuel López Obrador halted bid rounds, farmout tenders and service contract migrations –the three principal mechanisms through which private sector firms can obtain equity stakes in new oil and gas contracts in Mexico– shortly after taking office in 2018.

There are still ways, however, for firms other than Pemex to enter the upstream space in Mexico.

Pemex and New Fortress Energy Inc. (NFE) finalized a deal in November to complete seven wells that have already been drilled at the Pemex-operated Lakach deepwater gas and condensate field. 

Plans are for NFE to deploy a 1.4 million metric tons/year “Fast LNG” floating liquefaction unit to the project to export gas produced from Lakach. Additional gas volumes would be piped onshore to serve Mexico’s internal demand.

Talos Energy Inc., meanwhile, said in its latest quarterly report that it expects to sanction development of the Zama offshore field with partner and operator Pemex by March 2023. 

A Talos-led consortium discovered the oil-rich offshore deposit in 2017, but Mexico’s energy ministry made Pemex the operator in March of this year.

U.S. Gas Imports Set to Grow

Mexico relies primarily on pipeline gas imports from the United States to meet its internal needs. Imports accounted for 69% of Mexico’s gas supply in August, according to the latest data available from CNH. Excluding gas consumed by Pemex, the share of imports was 83%.

Mexico’s total gas consumption, including that of Pemex, was about 8.6 Bcf/d in August, CNH data show.

TC Energy Corp., whose pipeline network moves about 25% of the natural gas consumed in Mexico, is projecting Mexico’s gas demand to grow by about 35% from current levels to reach 12 Bcf/d by 2030, with over 1 Bcf/d of incremental demand expected in the southeast alone by 2025. The company expects pipeline imports from the United States to reach 9 Bcf/d by 2030, up from about 6 Bcf/d currently.

As for crude oil, production in Mexico averaged 1.62 million b/d in October, down from 1.65 million b/d a year earlier.

Pemex production dipped to 1.52 million b/d from 1.58 million b/d in October 2021. Non-Pemex operators produced 104,642 b/d, up from 68,168 b/d.

The top oil-producing fields, all operated by Pemex, were Maloob (279,000 b/d), Zaap (228,000 b/d), Ayatsill (95,000 b/d), Xanab (69,000 b/d) and Balam (48,000 b/d).